Gazprom, Bulgaria Sign Final Investment Decision on South Stream, New Gas Deal
Bulgaria and Russia's Gazprom on Thursday signed the final investment decision on the construction of the South Stream gas pipeline on Bulgarian territory, the energy ministry in Sofia said.
A new, ten-year contract for the supply of Russian gas at more than 20% discount from January 1, 2013 was also signed, the ministry said in a statement.
South Stream, a project initiated by Gazprom and Italy's Eni, is expected to carry 63 billion cubic metres of Russian natural gas per year under the Black Sea to Europe, starting in 2015. The Bulgarian section will be approximately 540 kilometres long with three compressor stations. It is estimated to cost 3.309 billion euro ($4.2 billion).
The new gas supply contract allows Bulgaria to reduce the supply volumes from the sixth year onwards by as much as its own planned gas output. The contract provides for the supply of 2.9 billion cubic metres of Russian gas to Bulgaria per year. It was signed directly between Gazprom Export and Bulgaria's state-owned gas monopoly Bulgargaz to avoid supply intermediaries.